Top marks if you guessed B. The Eliza Hobo is one of hundreds of extraordinarily priced bags, totes and clutches churned out by Mulberry, Britain’s homegrown purveyor of high fashion.

Yet Mulberry, which for years has been a darling of the City, has a problem. In these straitened times, fewer people are willing to drop a few thousand on a bit of ostrich skin that does a job a Tesco carrier bag can do just as well.

Analysts expect the company to have earned £26m on £164m last year, a 28% profit drop from the year before. Its shares have